SINKING FUND PROPOSALS.

Dominion, Volume 3, Issue 923, 16 September 1910, Page 2

SINKING FUND PROPOSALS.

AS THEY APPEAR TO ACCOUNTANTS" "Question box" , evening l-.witli. the'' Adcounta'iit Students'': Society, - regularly : evokes ■ some ■ interesting-. side-lights ■on .current problems ill.tho financial world. At Wednesday's meeting of the society, which .was -very well attended,. th'e ; most ' topical question in : the.:box- was No. 11, : : * which;ran as, follows:--..." \i. . "State' concisely the' sinking", fund , pro-<?. . . posals" of : the l'riuie Minister; for the riv iiemption of the national debt. Is it a . sinking fund as understood by accountants, and are \l here any special:features', in' it?"v - ." "As ■ understeod by. accountants; thu proposal is to. establish a sinking fund -:. 1 for -the.redemption u£ ;the: national:, deb't, . .-. -. :At the' end .of , each. finA'ncialVyear.,; tho ',Auditor-General- v;ould: 'certify';t!)-.th6.ex- ; : . act- amount of. thepublic' debt; and' tho : ; j sum .which, .if: invested at;i per cent., com- ■':. ; pound interest, would. be actuarially re- . quired to extinguish the debt in'l seventy.v, " five: y-earsi . such' amount;'to - be/payabla -'':' 7 . out of' the Consolidated: I'und.' - Thij H-i .amount; of • thisr annual sum-.would;: iif.i, ? course, I vary - each year - according" .to/the . « i;" then amount of the debt, and: tho !f. ra:te, of:interest' being ;earned,by;,the in.-.-"'. vestment, .'for 'it is. ..after r. .' the; end ': of tha;. '. interest instead -of. being;., calculated; at}. the rate of i per cent'.:'should -he : actual avei'ago net intere.st.,eamdt;by- the funds investtfd;:during Itheiprevious:.three years.... The object, of ; is to save borrowing. ■'Ee»arding tho'second.part:ofi'the ques- ; v tion;'.it ; is a sinking-fund.'as,'understood . by accountants in \thfe .brdihafy.sense of;. ..- the - term, inasmuch.- as:-it;-is'i'cjreStedj-for r/ ... ; a sp'eoiiic object,'; a ' that ■. all ' investments -are to ' ; be." madey : .\, . within the Dominl6h;.in : ioaiis : ;.t6*settlers,^; to workers, and: to local' anthqiitiesi 'Untier the provisions of' the New; Zealand =:: State :Guaranteed , Advances' : Act,; 1909.;;. .. -This at. firstVir.ay net; teem to'"be a;very ' sound: policy, but considering the: groat' ' and -growinj demand for money.-in' the ■ Dominion for development 'purposes there need not fit . was thought) be; any mis- ■ apprehension 'as .to the failure to invest;'. the .funds." !£- ; : '.